India's Economic Leap: Now the World's Fourth Largest Economy
India surpasses Japan, becoming the world's fourth largest economy, but how close is it to reaching the top three? Explore India's economic journey.
India has marked an extraordinary milestone, surpassing Japan to become the world’s fourth-largest economy. This profound shift in the global economic hierarchy is a testament to India’s growing economic strength and influence. As announced by NITI Aayog CEO BVR Subrahmanyam, India now stands behind only the USA, China, and Germany in terms of GDP size.
The Path to the Fourth Position
The journey to becoming the fourth-largest economy was not merely a stroke of luck. According to the International Monetary Fund (IMF), India’s Gross Domestic Product currently surpasses \(4.187 trillion, overtaking Japan's \)14.186 trillion remarkably. This growth trajectory reflects India’s robust economic policies and market dynamics that favor expansion.
Who’s Still Ahead?
Although India has achieved significant progress, it trails behind three economic giants: the USA with a GDP of \(30.51 trillion, China with \)19.23 trillion, and Germany with $4.74 trillion. The road to catching up with these nations is steep, considering the USA’s GDP is seven times larger than India’s current figures, underscoring the challenges ahead.
A Look at Future Growth
Interestingly, projections from the IMF suggest that India will maintain a steady growth pace, with expectations of a 6.2% increase in 2025 and 6.3% in 2026. However, the IMF’s downward revision for 2025 due to global trade tensions and uncertainties highlights the volatility in the global economic landscape. According to News18, these projections put India at a compelling crossroads.
Per Capita Perspective
Despite its vast GDP, India’s position is less favorable when examining its GDP per capita. Ranked 144th globally, India’s per capita GDP ranges between \(2,850 and \)2,900. Contrastingly, smaller countries like Luxembourg, Switzerland, and Ireland lead the rankings with per capita GDPs exceeding $100,000.
Challenges and Opportunities
The future for India is peppered with challenges and opportunities. While China is projected to face a sharper decline in GDP growth over the next decades, India’s better demographic prognosis suggests a smaller reduction in growth rate between 2025-2050. Nevertheless, as India approaches its demographic turning point, a steeper decline is anticipated in the latter half of the century.
In conclusion, India’s current economic position is a commendable achievement. Yet, the journey to the No. 1 spot remains arduous, demanding strategic policies and sustained growth endeavors.